HOUSTON, May 15, 2018 /PRNewswire/ -- Goodrich
Petroleum Corporation (NYSE MKT: GDP) (the "Company") today
announced financial results and an operational update for the first
quarter ended March 31,
2018.
RECENT DEVELOPMENTS
The Company has entered into an agreement, subject to definitive
documentation, to sell a portion of its interest in the western
area of the Company's Tuscaloosa Marine Shale acreage position in
East and West Feliciana Parishes, Louisiana for $3.3
million. The transaction is expected to close on or before
June 15, 2018.
The Company has reached an agreement, subject to definitive
documentation, with respect to an acreage swap on a portion of the
Company's leasehold in the Bethany-Longstreet Field of Caddo Parish, Louisiana, which would add ten
10,000 foot laterals to its operated inventory.
In addition, the Company has reached an agreement, subject to
definitive documentation, to amend a gas gathering agreement with
the midstream provider on what has historically been its
non-operated acreage in the Bethany-Longstreet Field which will
reduce the gathering fees from $0.53
(operated) - $0.75 (non-operated) per
Mcf to a range of $0.26 (operated) -
$0.60 (non-operated) per Mcf,
dependent on volumes. Gathering fees on the remainder of the
Company's core Haynesville acreage
in North Louisiana will continue
to be $0.22 to $0.37 per Mcf, dependent on the area. This
amended gathering agreement is expected to materially reduce future
gathering and transportation expense as the Company grows
production volumes from development of its Haynesville Shale
acreage.
OPERATIONAL UPDATE
The Cason-Dickson 14-23 1H well
(92% WI) and Cason-Dickson 14-23
2H well (86% WI) in Red River Parish,
Louisiana were successfully fracture stimulated with 64 and
33 stages, respectively. The Cason-Dickson 14-23 1H well was completed with
a lateral length of approximately 8,000 feet and stimulated with
approximately 4,000 pounds of proppant per foot. The Cason-Dickson 14-23 2H well was completed with
a lateral length of approximately 3,000 feet and stimulated with
approximately 5,000 pounds of proppant per foot. The completed
lateral length in the 2H well was reduced versus the planned
lateral length due to a downhole equipment malfunction which
obstructed a portion of the lateral. All future extended reach
laterals will use a different system to prepare the lateral for
completion to eliminate this issue going forward. In addition, the
downhole malfunction created an additional delay in the completion
of the Cason-Dickson 14-23 2H and
flowback of the Cason-Dickson
14-23 1H, however both wells are expected to commence flowback
today with initial production rates on both wells expected to be
released within the next two weeks.
The Company is currently running one rig, which is drilling its
Wurtsbaugh 35 No. 1 (72% WI) well in the Bethany-Longstreet field. The well, which will
be an earn-in well under a farmout agreement, is planned for a
4,600 foot lateral with a frac date currently scheduled for
June. A second rig is expected to commence operations in late
June to drill the Harris-Dickson 14-23 3H (estimated 95% WI) well,
which is planned as an approximate 7,000 foot lateral to re-drill
the remainder of the lateral originally planned for the
Cason-Dickson 14-23 2H well.
The Company has participated for an approximate 7.5% working
interest in two non-operated wells in the Bethany-Longstreet field of Caddo Parish, Louisiana that were completed in
April at a blended average peak rate of approximately 35,000 Mcfe
per day from an average of approximately 9,700 feet of lateral.
THE COMPANY HAS POSTED A NEW PRESENTATION ON THE COMPANY'S
WEBSITE WHICH WILL BE REVIEWED ON THE EARNINGS CONFERENCE
CALL. INVESTORS CAN ACCESS THE SLIDES AT:
http://goodrichpetroleum.investorroom.com/events-and-presentations
1Q18 FINANCIAL RESULTS
REVENUES
Revenues totaled $11.8 million in
the quarter, versus $9.4 million in
the prior year period. Average realized price per unit was
$3.57 per Mcfe ($2.68 per Mcf of gas and $65.00 per barrel of oil) in the quarter, versus
$4.05 per Mcfe in the prior year
period ($2.89 per Mcf of gas and
$50.12 per barrel of
oil).
PRODUCTION
Production totaled approximately 3.3 Bcfe in the quarter, or an
average of approximately 37,000 Mcfe per day, versus 2.3 Bcfe, or
average daily production of approximately 26,000 Mcfe per day, in
the prior year period. Natural gas production totaled 3.0 Bcf
in the quarter (89% of total production), versus 1.8 Bcf (79% of
total production) during the prior year period. Natural gas
production for the quarter was positively impacted by three
operated Haynesville Shale Trend wells completed late in the first
quarter, but negatively impacted by shut-ins due to offset fracs of
approximately 4,300 Mcfe per day for the quarter, as well as frac
delays. Production for the second quarter to date has averaged
47,000 Mcfe per day (92% natural gas) prior to production additions
from the Cason-Dickson wells which
are expected to increase Company production to in excess of 70,000
Mcfe per day. Due to completion delays described herein, the
Company is revising its full year production guidance to an average
of 65,000 to 75,000 Mcfe per day, but maintaining its 2018 Exit
Rate of 100,000 Mcfe per day. The Company is raising its 2019
guidance to growth of 100-120% over the midpoint of 2018
guidance.
CAPITAL EXPENDITURES
Capital expenditures totaled $21.0
million in the quarter, of which $20.6 million was spent on drilling and
completion costs and $0.4 on other
expenditures, versus $6.2 million in
the prior year period of which $6.0
million was spent on drilling and completion costs and
$0.2 million on other
expenditures. All of the quarter's total capital expenditures
were spent in the Haynesville Shale Trend. The Company
anticipates capital expenditures of approximately $30 million in the second quarter and reaffirms
its full year preliminary capital budget of $85-95 million. Preliminary capital
expenditure plans for 2019 also remain unchanged at a range of
$125 - $150
million and focused on the Core of the Haynesville
Shale.
CASH FLOW
Adjusted EBITDA was $3.4 million
in the quarter and discretionary cash flow ("DCF"), defined as net
cash provided by operating activities before changes in working
capital, was $3.2 million in the
quarter versus Adjusted EBITDA of $0.7
million and DCF of $0.4
million in the prior year period.
(See accompanying tables at the end of this press release that
reconcile Adjusted EBITDA and DCF, each of which are non-US GAAP
financial measures, to their most directly comparable US GAAP
financial measure.)
NET LOSS
The Company announced a net loss of $5.3
million in the quarter, or $0.47 per basic share, versus a net loss of
$5.7 million or $0.63 per basic share in the prior year
period.
OPERATING EXPENSES
Lease operating expense ("LOE") was $2.6
million in the quarter or $0.77 per Mcfe, versus $4.3 million, or $1.86 per Mcfe in the prior year period.
LOE for the quarter included $0.3
million, or $0.10 per Mcfe,
for workovers, versus $2.1 million or
$0.92 per Mcfe in the prior year
period. Lease operating expense for the quarter excluding workovers
was $2.2 million or $0.67 per Mcfe versus $2.2
million or $0.94 per Mcfe in
the prior year period. Per unit LOE is expected to continue to fall
as we increase production from the Haynesville which carries a very low per unit
LOE.
Production and other taxes were $0.6
million in the quarter or $0.19 per Mcfe, versus $0.7 million, or $0.28 per Mcfe in the prior year period.
Transportation and processing expense was $1.3 million in the quarter, or $0.40 per Mcfe, versus $1.2 million or $0.51 per Mcfe in the prior year period.
Depreciation, depletion and amortization ("DD&A") expense
was $3.5 million in the quarter or
$1.04 per Mcfe, versus $2.3 million, or $0.99 per Mcfe in the prior year period.
General and administrative expense was $5.2 million in the quarter, or $1.57 per Mcfe, which includes non-cash expense
of $1.7 million, or $0.51 per Mcfe, for stock based compensation
versus $4.5 million, or $1.92 per Mcfe, in the prior year period which
included $1.0 million for stock based
compensation.
OPERATING LOSS
Operating loss, defined as revenues minus operating expenses,
totaled $1.3 million in the quarter,
versus an operating loss of $3.5
million in the prior year
period.
INTEREST EXPENSE
Interest expense totaled $2.7
million in the quarter, or $0.81 per Mcfe, which includes cash interest of
$0.2 million incurred on the credit
facility and non-cash interest of $2.5
million incurred on the Company's second lien notes, which
includes $1.6 million paid in-kind
interest and $0.9 million
amortization of debt discount. Interest expense for the prior
year period totaled $2.2 million,
which included cash interest of $0.3
million incurred on the credit facility and non-cash
interest of $1.9 million incurred on
the Company's second lien notes, which included $1.4 million paid in-kind interest and
$0.5 million amortization of debt
discount.
CRUDE OIL AND NATURAL GAS DERIVATIVES
The Company had a loss of $1.0
million on its derivatives not designated as hedges in the
quarter, which is comprised of a loss of $0.6 million representing the change of the fair
value of our open natural gas and oil derivative contracts as well
as a $0.4 million loss on cash
settlement, versus a total loss of $0.3
million on its derivatives not designated as hedges in the
prior year period, which was comprised of a loss of $0.4 million representing the change in fair
value of our open natural gas and oil derivative contracts, offset
by a $0.2 million realized gain on
cash settlement.
The Company has added natural gas swaps through March 31, 2020 at $2.81 per Mcf, with new hedges shown on the
accompanying table at the end of this press release.
BALANCE SHEET
The Company exited the quarter with $9.7
million of cash, no borrowings under the Company's senior
credit facility (which has a current borrowing base of $40 million), and $48.6
million of funded debt. The Company expects a higher
borrowing base upon redetermination prior to the mid-year
review.
OTHER INFORMATION
In this press release, the Company refers to several non-US GAAP
financial measures, including Adjusted EBITDA and DCF.
Management believes Adjusted EBITDA and DCF are good financial
indicators of the Company's performance and ability to internally
generate operating funds. DCF should not be considered an
alternative to net cash provided by operating activities, as
defined by US GAAP. Adjusted EBITDA should not be
considered an alternative to net loss applicable to common stock,
as defined by US GAAP. Management believes that all of these
non-US GAAP financial measures provide useful information to
investors because they are monitored and used by Company management
and widely used by professional research analysts in the valuation
and investment recommendations of companies within the oil and gas
exploration and production industry.
Initial production rates are subject to decline over time and
should not be regarded as reflective of sustained production
levels. In particular, production from horizontal drilling in
shale oil and natural gas resource plays and tight natural gas
plays that are stimulated with extensive pressure fracturing are
typically characterized by significant early declines in production
rates.
Unless otherwise stated, oil production volumes include
condensate.
Certain statements in this news release regarding future
expectations and plans for future activities may be regarded as
"forward looking statements" within the meaning of the Securities
Litigation Reform Act. They are subject to various risks,
such as financial market conditions, changes in commodities prices
and costs of drilling and completion, operating hazards, drilling
risks, and the inherent uncertainties in interpreting engineering
data relating to underground accumulations of oil and gas, as well
as other risks discussed in detail in the Company's Annual Report
on Form 10-K for the year ended December 31,
2017 and other subsequent filings with the Securities and
Exchange Commission. Although the Company believes that the
expectations reflected in such forward looking statements are
reasonable, it can give no assurance that such expectations will
prove to be correct.
Goodrich Petroleum is an independent oil and natural gas
exploration and production company listed on the NYSE American MKT
under the symbol "GDP".
GOODRICH PETROLEUM
CORPORATION
|
SELECTED INCOME AND
PRODUCTION DATA
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2018
|
|
March 31,
2017
|
Volumes
|
|
|
|
|
Natural gas
(MMcf)
|
2,952
|
|
1,833
|
|
Oil and condensate
(MBbls)
|
61
|
|
82
|
|
Mmcfe -
Total
|
3,316
|
|
2,324
|
|
|
|
|
|
|
Mcfe per
day
|
36,844
|
|
25,822
|
|
|
|
|
|
Oil and natural gas
revenues
|
$
11,843
|
|
$
9,411
|
Other
|
(9)
|
|
2
|
|
|
$
11,834
|
|
$
9,413
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
Lease operating
expense (LOE excluding workovers - $2,218 and $2,163,
respectively)
|
2,566
|
|
4,311
|
|
Production and other
taxes
|
640
|
|
659
|
|
Transportation and
processing
|
1,312
|
|
1,176
|
|
Depreciation,
depletion and amortization
|
3,452
|
|
2,294
|
|
General and
administrative (non-cash stock compensation - $1,675 and
$1,728)
|
5,196
|
|
4,463
|
Operating
loss
|
(1,332)
|
|
(3,490)
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
Interest expense
(payable in cash - $173 and $252, respectively)
|
(2,673)
|
|
(2,179)
|
|
Interest income
(expense) and other
|
(7)
|
|
9
|
|
Loss on commodity
derivatives not designated as hedges
|
(981)
|
|
(260)
|
|
|
(3,661)
|
|
(2,430)
|
|
|
|
|
|
Reorganization gain
(loss), net
|
(331)
|
|
195
|
|
|
|
|
|
Loss before income
taxes
|
(5,324)
|
|
(5,725)
|
Income tax
expense
|
-
|
|
-
|
Net loss
|
$
(5,324)
|
|
$
(5,725)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discretionary cash
flow (see non-US GAAP reconciliation) (1)
|
$
3,232
|
|
$
445
|
|
|
|
|
|
|
Adjusted EBITDA (see
calculation and non-US GAAP reconciliation) (2)
|
$
3,411
|
|
$
674
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
11,218
|
|
9,109
|
Weighted average
common shares outstanding - diluted (3)
|
11,218
|
|
9,109
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
Net loss -
basic
|
$
(0.47)
|
|
$
(0.63)
|
|
Net loss -
diluted
|
$
(0.47)
|
|
$
(0.63)
|
|
(1) Discretionary
cash flow is defined as net cash provided by operating activities
before changes in operating assets and liabilities. Management
believes that the non-US GAAP measure of discretionary cash flow is
useful as an indicator of an oil and natural gas exploration and
production company's ability to internally fund exploration and
development activities and to service or incur additional debt. The
company has also included this information because changes in
operating assets and liabilities relate to the timing of cash
receipts and disbursements which the company may not control and
may not relate to the period in which the operating activities
occurred. Operating cash flow should not be considered in isolation
or as a substitute for net cash provided by operating activities
prepared in accordance with US GAAP.
|
|
(2) Adjusted EBITDA
is defined as earnings before interest expense, income and similar
taxes, DD&A, share based compensation expense and impairment of
oil and natural gas properties. In calculating adjusted EBITDA,
gains on reorganization, gains/losses on commodity derivatives not
designated as hedges and net cash received or paid in settlement of
derivative instruments are also excluded. Other excluded items
include interest income and other, and any non-recurring non-cash
gains or losses.
|
|
(3) Fully diluted
shares excludes approximately 4.0 million potentially dilutive
instruments that were anti-dilutive for the three months ended
March 31, 2018 and 6.0 million potentially dilutive instruments
that were anti-dilutive for the three months ended March 31,
2017.
|
GOODRICH PETROLEUM
CORPORATION
|
Per Unit Sales Prices
and Costs
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2018
|
|
March 31,
2017
|
|
|
|
|
|
Average sales price
per unit:
|
|
|
|
|
Oil (per
Bbl)
|
|
|
|
|
Including net cash
received from/paid to settle oil derivatives
|
$
57.99
|
|
$
50.12
|
|
Excluding net cash
received from/paid to settle oil derivatives
|
$
65.00
|
|
$
50.12
|
|
Natural gas (per
Mcf)
|
|
|
|
|
Including net cash
received from/paid to settle natural gas derivatives
|
$
2.69
|
|
$
2.97
|
|
Excluding net cash
received from/paid to settle natural gas derivatives
|
$
2.68
|
|
$
2.89
|
|
Oil and natural gas
(per Mcfe)
|
|
|
|
|
Including net cash
received from/paid to settle oil and natural gas
derivatives
|
$
3.45
|
|
$
4.11
|
|
Excluding net cash
received from/paid to settle oil and natural gas
derivatives
|
$
3.57
|
|
$
4.05
|
|
|
|
|
|
|
|
|
|
|
Costs Per
Mcfe
|
|
|
|
|
Lease operating
expense ($0.67 and $0.94 Per Mcfe excluding Workovers,
respectively)
|
$
0.77
|
|
$
1.86
|
|
Production and other
taxes
|
$
0.19
|
|
$
0.28
|
|
Transportation and
processing
|
$
0.40
|
|
$
0.51
|
|
Depreciation,
depletion and amortization
|
$
1.04
|
|
$
0.99
|
|
General and
administrative
|
$
1.57
|
|
$
1.92
|
|
|
$
3.97
|
|
$
5.55
|
|
Note: Amounts on a
per Mcfe basis may not total due to rounding.
|
GOODRICH PETROLEUM
CORPORATION
|
Selected Cash Flow
Data (In Thousands):
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
discretionary cash flow and net cash provided by operating
activities (unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2018
|
|
March 31,
2017
|
|
|
|
|
Net cash provided by
operating activities (US GAAP)
|
6,256
|
|
4,665
|
Net changes in
working capital
|
3,024
|
|
4,220
|
Discretionary cash
flow
|
$
3,232
|
|
$
445
|
|
|
|
|
|
Supplemental
Balance Sheet Data (unaudited)
|
|
|
As of
|
|
|
|
|
March 31,
2018
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
9,731
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
$
41,464
|
|
|
|
Unamortized debt
discount and issuance cost
|
7,138
|
|
|
|
Total principal
amount of debt
|
$
48,602
|
|
|
|
|
|
|
|
Reconciliation of
Net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2018
|
|
March 31,
2017
|
|
|
|
|
|
|
Net loss (US
GAAP)
|
$
(5,324)
|
|
$
(5,725)
|
|
Depreciation,
depletion and amortization ("DD&A")
|
3,452
|
|
2,294
|
|
Stock compensation
expense (non-cash)
|
1,675
|
|
1,728
|
|
Interest
expense
|
2,673
|
|
2,179
|
|
Loss on derivatives
not designated as hedges
|
981
|
|
260
|
|
Net cash received in
(paid for) settlement of derivative instruments
|
(384)
|
|
142
|
|
Other excluded items
**
|
338
|
|
(204)
|
|
Adjusted EBITDA
(2)
|
$
3,411
|
|
$
674
|
|
|
|
|
|
|
** Other
excluded items include interest income, reorganization items and
other non-recurring income and expense.
|
|
|
|
|
|
Other Information
and Reconciliations
|
|
|
|
|
|
|
Derivative
Activity
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2018
|
|
March 31,
2017
|
|
Change in fair value
of derivatives not designated as hedges
|
$
(597)
|
|
$
(402)
|
|
Net cash received in
(paid for) settlement of derivative instruments
|
(384)
|
|
142
|
|
Net loss on
derivatives not designated as hedges
|
$
(981)
|
|
$
(260)
|
|
|
|
|
|
Reconciliation of
interest payable in cash to interest expense
(unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2018
|
|
March 31,
2017
|
|
|
|
|
|
|
Interest expense
(GAAP)
|
$
2,673
|
|
$
2,179
|
|
Amortization of debt
discount and paid-in-kind interest
|
(2,500)
|
|
(1,927)
|
|
Interest payable in
cash
|
$
173
|
|
$
252
|
GOODRICH PETROLEUM
CORPORATION
|
Other Information and
reconciliations continued (In Thousands):
|
|
|
|
|
|
Reconciliation of
capital expenditures (unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2018
|
|
March 31,
2017
|
Net cash used in
investing activities (US GAAP)
|
$
(5,781)
|
|
$
(3,384)
|
Cash calls
utilized
|
-
|
|
(294)
|
Inventory
utilized
|
(204)
|
|
-
|
Cash proceeds from
sale of assets
|
(23,209)
|
|
-
|
Miscellaneous
capitalized costs
|
(177)
|
|
-
|
Cost incurred in
prior period and paid in current period
|
10,511
|
|
648
|
Capital accrual at
period end
|
(2,151)
|
|
(3,209)
|
Total capital
expenditures
|
$
(21,011)
|
|
$
(6,239)
|
|
|
|
|
|
|
Reconciliation of
drilling and completion capital expenditures used in finding and
development cost per Mcfe calculations (unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
March 31,
2018
|
|
March 31,
2017
|
Total capital
expenditures (per above)
|
$
(21,011)
|
|
$
(6,239)
|
Capitalized internal
costs
|
677
|
|
562
|
Drilling and
completion capital expenditures
|
$
(20,334)
|
|
$
(5,677)
|
GOODRICH PETROLEUM
CORPORATION
|
CRUDE OIL AND NATURAL
GAS DERIVATIVES
|
|
|
|
|
|
Period
|
|
Natural Gas
Volumes
(MMbtu/day)
|
|
Natural Gas
Price
|
1Q19
|
|
16,000
|
|
$
2.814
|
2Q19
|
|
32,500
|
|
$
2.814
|
3Q19
|
|
32,500
|
|
$
2.814
|
4Q19
|
|
32,500
|
|
$
2.814
|
1Q20
|
|
40,000
|
|
$
2.814
|
View original
content:http://www.prnewswire.com/news-releases/goodrich-petroleum-announces-recent-developments-operational-update-and-first-quarter-2018-financial-results-300648080.html
SOURCE Goodrich Petroleum Corporation